The Stokes County Board of Commissioners’ meeting was filled with a prevalent sense of gloom Monday as County Manager Rick Morris presented his proposed 2016-17 budget.
Morris told the board the county continued to face declining revenues and increasing operating costs resulting in a $47,073,728 budget which would raise both property and fire taxes, pull $2,297,018 from the county’s fund balance, and reduce current expense funding for county schools.
“This budget recommendation does not include or address in any way the recent hospital bankruptcy situation, which will have to be dealt with separately as part of the budget approval process,” said Morris. “The county finds itself in a very dynamic, volatile environment financially.”
He said the county was still dealing with the loss of “hold harmless” revenue and decreased property evaluations while facing major compensation deficiencies, resulting in tremendous turnover, in some departments like EMS and social services. He added that the county budget is approximately $4.8 million below the budgets of other counties of similar size.
“Difficult challenges need to be addressed now and not later to continue local government services at a level that most people expect and often take for granted,” said Morris, noting that the budget represented a 4.78 percent increase over last year and included a significant change in how EMS services are staffed as well as funding for a grant program to provide high speed internet access to unserved areas of the county.
“Competitive salaries are needed to hire and retain employees who are often performing complex and dangerous jobs for the public,” said Morris, noting that the proposed budget included $45,000 to conduct an outside salary study, something which has not been done in 16 years. “The most critical emerging issue in Stokes County government is the non-competitive level of base salaries which directly impacts the operational stability of the county.”
He added that the county would soon be facing a loss of key long-term personnel with large quantities of institutional knowledge as a result of likely upcoming retirements.
Morris said he had dramatically cut funding requests from every county department, noting that this year’s budget, and the fact little or no money would be returned to the county’s fund balance, showed how lean the county was already running.
“A budget strategy of ignoring equipment needs or making large across-the-board cuts during a tough budget year is short-sighted, unrealistic and ignores the realities of conducting the county’s day-to-day operations,” said Morris.
Excluding changes to EMS, the proposed budget includes 11 personnel reclassifications and adds eight new positions, all of which are needed, according to Morris, to meet increasing volumes of work.
Changes in EMS
Morris is recommending that the EMS department change its current staffing schedule from the current 24-hours-on/ 48-hours-off shift to a 24-hours-on/72-hours-off shift to be more competitive in attracting needed paramedics.
“Many of our competing counties have already gone to 24/72 or 12 hour shifts, paying time and half for overtime and in most cases have higher base salaries than Stokes,” said Morris. “This will require the addition of 11 positions and cost approximately $518,756 per year including fringe benefits. Absent some action being taken, it will be impossible to keep five ambulances staffed to provide the current coverage because of the competitive environment.”
Morris said he was also recommending a study to consider privatizing EMS in the next two years along with an internal study to determine if other changes need to be made in the department to remain competitive.
School funding cut
The proposed county budget would cut school current expense funding from last year’s level of $10,211,763 to $9,817,340. The School Board had requested $11,337,935 in funding this year, due largely to the depletion of its own fund balance.
“Though the ADM level has decreased by approximately 741 students since 2013 the current expense appropriation to the school system has remained at $10,211,763 for the past four years,” said Morris, noting that the school system had also closed a school, Francisco Elementary, in the past year. “Given the combination of student reductions and facility closing, the county now needs to adjust the school system’s current expense budget to reflect these changes.”
Morris said the proposed budget provides the same per-pupil, $1,586, funding as previous years.
“That compares very favorably to other counties with similar populations to Stokes County,” said Morris.
He said the proposed budget also includes $651,000 in capital expense funding for the school system in addition to the previously approved $1,250,000 for repairs to the Chestnut Grove Middle School roof, which matches the amount of capital funding the school system had requested.
Morris said the proposed budget provides increased funding for economic development in the county, including staffing changes recommended by the Economic Development Planning and Assessment Committee, $600,000 for the broadband grant, and $12,000 in additional funding for advertising and marketing.
Park grant program suspended
The proposed budget also puts a one year moratorium on a successful park grant program which provided $2,000 in matching funds to county owned community parks for repairs and renovations.
“My recommendation continues to provide $2,000 per park allocated to county parks for the operations and maintenance expenses of the parks,” said Morris.
Morris is recommending a one cent increase in the county fire tax to allow departments to adequately staff through hired personnel.
Hospital cost a big unknown
Morris said the proposed budget did not include any funding should the county need to take over operation of the hospital.
“A cash infusion of an amount to be determined before budget approval will be required in the 2016-17 budget for hospital operations,” said Morris. “The recommended two cent Ad Valorem tax increase does not include funds for operation of the hospital. An additional property tax increase beyond the two cents will be required to fund hospital operations during any period where the hospital operations are directly under county control. The exact amount of tax funds that will actually be spent will depend directly on how well the hospital performs financially, which is to be determined.”
Water/sewer rates to increase
Residents getting water or sewer services directly from the county will see their rates increase under the proposed budget to keep the rates comparable to state guidelines and help pay for a required radium reduction system.
Morris noted that both the water and sewer funds could be negatively impacted should the hospital, the system’s biggest customer, cease operations.
Customers of the regional sewer fund will see their rates increase from the basic $14 monthly service fee to $17 and see the rate per 1,000 gallons increase from $5.75 to $6, under the proposed budget.
Customers of the Danbury water fund will see their basic monthly service fee rise from $23 to $28 and see the rate per 1,000 gallons increase from $6.75 to $7.25 if the budget is approved.
The proposed budget provides $210,000 in funding for the radium removal filtration system required by the North Carolina Department of Environmental Quality.
Morris said the bleak budget was a result of a “perfect storm” facing the county.
“We have run out of sufficient revenue to fund the county operations without Ad Valorem tax increases until future sources of increased revenue allow us to do otherwise,” he said. “This budget recommendation is all about real needs of this county based on my, and our department head’s, best collective assessment of where the county is at at this time. For those ideologues who never support tax increases to support the county’s general fund and fire service, I would counter with the fact that tax increases have been minimal during the past 10 years when compared to the accomplishments from this county government’s elected officials and staff.”
Nicholas Elmes may be reached at 336-591-8191 or on Twitter @NicholasElmes.